PLDT core net income drops 21% in 2016

THE Philippines’ most valuable telecommunications company, PLDT Inc., said on Tuesday its consolidated core net income dropped 21 percent in 2016 on lower revenues and as the cost of shifting its business to digital services pile up.

In a briefing in Makati City, PLDT Chief Financial Officer Annabelle Chua said consolidated core net income fell to P27.9 billion in 2016 from P35.2 billion in 2015, while consolidated service revenues fell 3 percent to P147.6 billion.

Net income reached P20.01 billion in 2016, down from P22.07 billion in 2015, while revenue also fell to P165.26 billion pesos from P171.1 billion previously.

“It’s in line with guidance and reflected the impact of both lower EBITDA and higher capex [capital expenditure],” Chua said.

Recurring core income totaled P20.2 billion last year while expenses, which were fueled by higher capex to support the company’s ongoing expansion of fixed lines and mobile networks, reached P140.5 billion last year, up from P139.3 billion in 2015.

PLDT Chairman Manuel V. Pangilinan said he expects PLDT to recover in profitability this year, for the first time in three years, targeting a six-percent growth in recurring core net income to P21.5 billion.

Pangilinan said that recurring income will likely grow in 2017 as the company recovers from a price war and shift to mobile internet services that have eroded revenue from calls and texts.

“We faced very tough tests in the past year as competition intensified and the shift to digital services accelerated. Our results reflect the impact of these challenges, but also point to us the way forward,” he said.
PLDT Home and Enterprise, which together account for 47 percent of consolidated service revenues, reported revenue growth of 10 percent to P29.3 billion and 9 percent to P30.6 billion, respectively.

The Wireless Consumer Business Group, which consists of the mobile services for individual customers of Smart and Sun, generated service revenues of P66.4 billion, or 9 percent lower than the previous year, due to declines in SMS and domestic voice revenues.

On the other hand, mobile data grew 20 percent and now accounts for 34 percent of total service revenues, ahead of SMS and domestic voice revenues.

Pangilinan said substantial resources are being channeled into PLDT’s digital pivot. Of the P48 billion allocated for capex in 2016, P42.8 billion were actually spent. The balance pertains to projects pending completion or acceptance.

Capex for 2017 is budgeted at P46 billion, inclusive of carry-overs from 2016.